Parents, grandparents and other family members concerned about an individual with special needs may decide to establish a special needs trust. A special needs trust can provide ongoing financial support for those who are not able to live independently. They can be a critical resource for those living with debilitating medical conditions.
Sometimes, family members worry that they may not have adequate resources to properly fund a special needs trust. What are some of the more common funding solutions for those who worry about a vulnerable family member?
Specific financial resources
Some people set aside a portion of each paycheck to establish a nest egg for a special needs trust. Other people might arrange for certain financial accounts to transfer to a trust after their passing as a means of leaving support for a vulnerable loved one.
Life insurance proceeds
Not everyone has enough income or accrued capital to directly fund a special needs trust. Instead, they may want to arrange for the trust to receive their life insurance proceeds. Establishing the trust as the beneficiary of the insurance policy can provide significant funding after the passing of a parent or other concerned individual.
The family home
Keeping life as stable and predictable as possible is important for the comfort of an individual with special needs. Using the home where they live to fund a special needs trust can help ensure that their housing arrangements and daily schedule remain as stable as possible even after the passing of their primary caregivers.
Exploring different ways of providing support for a loved one with special needs can provide people with peace of mind. A properly funded special needs trust can significantly enhance a vulnerable person’s financial stability and quality of life.
